GST impact: Profitability of organised retail may improve in near-term, says CRISIL–सविस्तर माहितीसाठी Financial Express मधील बातमी वाचावी.

Operating margins of organised brick and mortar retailers are expected to improve by 100 basis points (bps) from about 6 per cent over next two financial years, according to a report. The profits are riding on online retailers going slow on discounts to reduce cash burn, benefits from the implementation of Goods and Services Tax (GST), and increasing store productivity, a Crisil report said. “We see the profitability of brick and mortar retailers improving as competitive intensity from online rivals and service tax on rent gets set off in the GST regime,” said Anuj Sethi, Senior Director, Crisil Ratings. “And as growth rises, so will revenue per square feet, which, in turn, will improve their fixed-cost absorption ability,” he added.
Further, the pace of store expansion is also expected to increase over the medium-term to cater to the increasing demand. Besides, the Department of Industrial Policy and Promotion (DIPP) regulation in March, which restricts discounting and vendor concentration, has been favourable for brick and mortar retailers.

via GST impact: Profitability of organised retail may improve in near-term, says CRISIL – The Financial Express